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Requirements of a System of Materials Control: The important requirements or essentials of adequate satisfactory system of materials control are as follows: Proper Coordination Competent Purchasing Agent Use of Standard…
Profit Center Definition: A business segment whose manager has control over cost and revenue but has no control over the use of investment funds.
Required Rate of Return Definition: The minimum rate of return that an investment project must yield to be acceptable.
Cost Accounting Procedure for Spoiled Goods: Cost accounting should provide product costs and cost control information. In the case of spoilage, the first requirement is to know the nature and…
Replacement Cost Method Definition: Replacement cost is the cost at which, on the date of issue of the material, there could be purchased another lot of material identical to that…
Traceable Fixed Cost Definition: Traceable fixed cost is a fixed cost that is incurred because of the existence of a particular business segment.
Split-Off Point Definition: That point in the manufacturing process where some or all of the joint products can be recognized as individual products.
Learning Objectives: Define and explain replacement cost method. What is the use of replacement cost method while cost by-products? Replacement cost method ordinarily is applied by firms whose by-products are…
Re-order Level or Ordering Point or Ordering Level: Definition and explanation of re-order point Formula of re-order level or ordering point Examples Definition and explanation: This is that level of…
Spending Variance in Factory Overhead Learning Objective of the article: Define and explain factory overhead spending variance. How is FOH spending variance calculated? Definition: Factory Overhead spending variance is the difference…
Renewal of a Bill of Exchange: Learning Objectives: Make journal entries in the books of drawer and acceptor when the original bill is cancelled and a new bill is drawn…
Specific Environment Definition: The part of the environment that is directly relevant to the achievement of an organization's goals.
Learning Objectives: Define and explain traceable and common fixed costs or expenses. What is the difference between traceable and common fixed costs? The most puzzling aspect of segmented income statements…
Relevant Cost Definition: A cost that differs between alternatives in a particular decision. In managerial accounting, this term is synonymous with avoidable cost and differential cost.
Relevant Range Definition: The range of activity within which assumptions about variable and fixed cost behavior are valid.
Specific Cost Method Definition: Under this method specific cost of materials issued is charged to production. When materials are purchased for a particular job, they should be charged to that…
Relaxing (Elevating) the Constraint Definition: An action that increases the capacity of a bottleneck. As a result constraint give some relaxation and productivity or provision of services to customers are…
Total Quality Management (TQM) Definition: Total quality management A approach to continuous improvement that focuses on customers and using teams of front-line workers to systematically identify and solve problems. This…
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Rubab Ali 
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